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Strategic Lithium Deal with Argentina

Context:

India is on the verge of finalizing a crucial agreement for five lithium blocks in Argentina, marking a pivotal step in diversifying its sources of critical minerals. This strategic move holds the potential to significantly diminish India’s dependency on China for essential resources, presenting a game-changing development in the country’s resource security.

Relevance:

GS III: Energy

Dimensions of the Article:

  1. Key Developments in India’s Lithium Exploration:
  2. Overview of Lithium

Key Developments in India’s Lithium Exploration:

Draft Agreement with CAMYEN:

  • The Union Ministry of Mines, through Khanij Bidesh India Ltd (KABIL), has initiated a draft exploration and development agreement with Argentinean miner CAMYEN for potential acquisition and development of five lithium blocks.

Non-disclosure Agreement with ENAMI:

  • KABIL has also entered a non-disclosure agreement with Chilean miner ENAMI, exploring possibilities for “exploration, extraction, processing, and commercialization” of lithium.

PwC Consultancy for Australian Projects:

  • In another strategic move, KABIL has appointed consultancy major PwC to identify investable projects in Australia.

India’s Lithium Acquisitions in Argentina:

  • Over the past year, India has intensified its pursuit of critical minerals, particularly lithium.
  • Lithium plays a crucial role in India’s shift towards green energy, aligning with efforts to reduce carbon footprints.
  • Argentina, known for its extensive lithium deposits and cost-effective production, emerges as a key source to fulfill India’s increasing demand for this vital mineral.

Argentina’s Lithium Industry:

  • Argentina currently boasts two active lithium mines, with 14 projects under construction or in advanced exploration stages as of September 2023.
  • The country is poised to become a leading lithium producer globally once these projects are operational.

KABIL Board Approval and Branch Office Proposal:

  • The KABIL board has previously sanctioned the ‘Draft Exploration and Development Agreement.’
  • The Ministry has subsequently greenlit a proposal to establish a Branch Office in Catamarca, Argentina, indicating a significant stride in India’s lithium acquisition ventures.

.

Overview of Lithium:

  • Chemical Properties:
    • Lithium is a chemical element denoted by the symbol Li and atomic number 3.
    • Classified as a soft, silvery-white alkali metal.
  • Special Characteristics:
    • Distinguished by its lightness and softness, allowing it to be cut with a kitchen knife.
    • Remarkably low density, enabling it to float on water.
Applications of Lithium:
  • Rechargeable Batteries:
    • Lithium is extensively utilized in rechargeable batteries for mobile phones, laptops, digital cameras, and electric vehicles (EVs).
    • Often referred to as “white gold” in the context of EVs.
  • Metal Alloys:
    • Lithium metal is alloyed with aluminum and magnesium, enhancing strength and reducing weight.
    • Aluminum-lithium alloys find applications in aircraft, bicycle frames, and high-speed trains.
  • Toxicity:
    • Lithium has no known biological role and is toxic in larger doses.
Natural Occurrence of Lithium:
  • Earth’s Crust Presence:
    • Lithium constitutes a mere 0.0007% of the Earth’s crust and is primarily found in minerals and salts.
  • Global Reserves:
    • Chile holds the world’s largest known lithium reserves, amounting to 9.3 million tonnes.
    • Australia follows with 6.2 million tonnes.
  • Indian Lithium Reserves:
    • The Geological Survey of India identified 9 million tonnes in the Salal-Haimana area of Reasi district, J&K, ranking India as the third-largest lithium resource globally.
  • Global Ranking:
    • Argentina (2.7 million tonnes) and China (2 million tonnes) follow India in lithium reserves.
  • Production Statistics:
    • Global lithium production surpassed 100,000 tonnes in 2021, with Australia contributing 52% of the world’s lithium.
Future of Lithium Production:
  • Projected Demand:
    • The rising demand for batteries and EVs is anticipated to require 1.5 million tonnes of lithium carbonate equivalent (LCE) by 2025 and over 3 million tonnes by 2030.
  • Production Requirements:
    • To meet these projections, lithium production needs to triple by 2025 and increase nearly six-fold by 2030.

-Source: The Hindu


February 2024
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